ISE Files Court Action Seeking to End Exclusive Listing of DJIA and S&P 500 Index Options

  
    
  
  
    
      The International Securities Exchange (NYSE:ISE) today announced that it 
      has filed a complaint in the United States District Court for the 
      Southern District of New York seeking to end the exclusive listing of 
      certain index options. ISE has asked the District Court to issue a 
      declaratory judgment holding that ISE does not need a license to list 
      index options on the Dow Jones Industrial Average (Ticker: DJX) and S&P 
      500 Index (Ticker: SPX). Currently, these two actively-traded index 
      options trade exclusively on the Chicago Board Options Exchange (CBOE) 
      pursuant to licensing agreements between CBOE and Dow Jones & Company, 
      the provider of the Dow Jones Industrial Average, and The McGraw-Hill 
      Companies, Inc., the provider of the S&P 500 Index. In June 2006, the 
      United States Court of Appeals for the Second Circuit ruled that ISE did 
      not need a license to list options on the SPDR and DIAMONDS ETFs.
    
    
      “ISE was founded on the belief that 
      competition among exchanges improves market efficiency and, ultimately, 
      benefits investors,” said David Krell, ISE’s 
      President and Chief Executive Officer. “We 
      have witnessed this occurrence for equity, ETF, and certain index 
      options since ISE announced its entry into the market eight years ago, 
      providing the spark that ended the practice of exclusively listing 
      options on only one exchange. As a result of ISE’s 
      leadership, the market has experienced increased liquidity, tighter 
      spreads, and lower customer transaction fees, and we want to deliver 
      those same benefits to investors in the remaining exclusively-listed 
      index options.”
    
    
      Since options have become multiply listed, annual options volumes have 
      nearly tripled from 507 million contracts traded on all exchanges in 
      1999 to over 1.5 billion contracts traded in 2005. Year-to-date options 
      volumes are up an additional 40.1% according to The Options Clearing 
      Corporation (OCC).
    
    
      Copies of ISE’s complaint are available from 
      the United States District Court for the Southern District of New York. 
      ISE is represented in the litigation by DLA Piper US LLP.
    
    
      ISE Background
    
    
      International Securities Exchange Holdings, Inc. (NYSE: ISE), through 
      its subsidiaries, operates a family of innovative securities markets. 
      ISE is founded on the principle that technology and competition create 
      better, more efficient markets for investors and consists of an options 
      exchange, a stock exchange and an alternative markets platform. ISE 
      continually enhances its trading systems and develops new products to 
      provide investors with the best marketplace and investment tools to 
      trade smarter.
    
    
      ISE developed a unique market structure for advanced screen-based 
      trading systems and in May 2000 launched the first fully-electronic US 
      options exchange. Currently, ISE is the largest U.S. equity options 
      exchange and is among the leading options exchanges in the world. ISE 
      offers index options, including a portfolio of proprietary index 
      products, and enhanced market data products for sophisticated investors. 
      ISE FX Options™ are slated to launch in the 
      first quarter of 2007.
    
    
      ISE Stock Exchange, launched in September 2006 with strategic partners, 
      includes an innovative MidPoint Match™ 
      platform which offers investors continuous price improvement. It is 
      expected that MidPoint Match will be integrated with a fully-displayed 
      Best Bid Offer market in the fourth quarter of 2006.
    
    
      ISE’s alternative markets business currently 
      consists of an events market trading platform known as Longitude. 
      Longitude’s patented and proprietary 
      technology provides a unique parimutuel structure for derivatives 
      auctions which results in greater trading and pricing flexibility for 
      market participants.
    
    
      For more information about ISE and its options exchange, visit www.iseoptions.com 
      and for more information about ISE Stock Exchange, visit www.isestock.com. 
      Additionally, to learn more about ISE alternative markets technology, 
      visit www.longitude.com.
    
    
      Forward Looking Statements
    
    
      Certain matters discussed in this press release are “forward 
      looking statements” intended to qualify for 
      the safe harbor from liability established by the Private Securities 
      Litigation Reform Act of 1995. These statements relate to future events 
      or our future financial performance, and involve known and unknown 
      risks, uncertainties and other factors that may cause our actual 
      results, levels of activity, performance or achievements, to be 
      materially different from those contemplated by the forward looking 
      statements. We undertake no ongoing obligation, other than that imposed 
      by law, to update these statements. Factors that could affect our 
      results, levels of activity, performance or achievements and cause them 
      to materially differ from those contained in the forward looking 
      statements can be found in our filings with the Securities and Exchange 
      Commission, including our annual report on Form 10-K, current reports on 
      Form 8-K and quarterly reports on Form 10-Q, as amended.
    
  
The International Securities Exchange (NYSE:ISE) today announced
that it has filed a complaint in the United States District Court for
the Southern District of New York seeking to end the exclusive listing
of certain index options. ISE has asked the District Court to issue a
declaratory judgment holding that ISE does not need a license to list
index options on the Dow Jones Industrial Average (Ticker: DJX) and
S&P 500 Index (Ticker: SPX). Currently, these two actively-traded
index options trade exclusively on the Chicago Board Options Exchange
(CBOE) pursuant to licensing agreements between CBOE and Dow Jones &
Company, the provider of the Dow Jones Industrial Average, and The
McGraw-Hill Companies, Inc., the provider of the S&P 500 Index. In
June 2006, the United States Court of Appeals for the Second Circuit
ruled that ISE did not need a license to list options on the SPDR and
DIAMONDS ETFs.

   "ISE was founded on the belief that competition among exchanges
improves market efficiency and, ultimately, benefits investors," said
David Krell, ISE's President and Chief Executive Officer. "We have
witnessed this occurrence for equity, ETF, and certain index options
since ISE announced its entry into the market eight years ago,
providing the spark that ended the practice of exclusively listing
options on only one exchange. As a result of ISE's leadership, the
market has experienced increased liquidity, tighter spreads, and lower
customer transaction fees, and we want to deliver those same benefits
to investors in the remaining exclusively-listed index options."

   Since options have become multiply listed, annual options volumes
have nearly tripled from 507 million contracts traded on all exchanges
in 1999 to over 1.5 billion contracts traded in 2005. Year-to-date
options volumes are up an additional 40.1% according to The Options
Clearing Corporation (OCC).

   Copies of ISE's complaint are available from the United States
District Court for the Southern District of New York. ISE is
represented in the litigation by DLA Piper US LLP.

   ISE Background

   International Securities Exchange Holdings, Inc. (NYSE: ISE),
through its subsidiaries, operates a family of innovative securities
markets. ISE is founded on the principle that technology and
competition create better, more efficient markets for investors and
consists of an options exchange, a stock exchange and an alternative
markets platform. ISE continually enhances its trading systems and
develops new products to provide investors with the best marketplace
and investment tools to trade smarter.

   ISE developed a unique market structure for advanced screen-based
trading systems and in May 2000 launched the first fully-electronic US
options exchange. Currently, ISE is the largest U.S. equity options
exchange and is among the leading options exchanges in the world. ISE
offers index options, including a portfolio of proprietary index
products, and enhanced market data products for sophisticated
investors. ISE FX Options(TM) are slated to launch in the first
quarter of 2007.

   ISE Stock Exchange, launched in September 2006 with strategic
partners, includes an innovative MidPoint Match(TM) platform which
offers investors continuous price improvement. It is expected that
MidPoint Match will be integrated with a fully-displayed Best Bid
Offer market in the fourth quarter of 2006.

   ISE's alternative markets business currently consists of an events
market trading platform known as Longitude. Longitude's patented and
proprietary technology provides a unique parimutuel structure for
derivatives auctions which results in greater trading and pricing
flexibility for market participants.

   For more information about ISE and its options exchange, visit
www.iseoptions.com and for more information about ISE Stock Exchange,
visit www.isestock.com. Additionally, to learn more about ISE
alternative markets technology, visit www.longitude.com.

   Forward Looking Statements

   Certain matters discussed in this press release are "forward
looking statements" intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform Act
of 1995. These statements relate to future events or our future
financial performance, and involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements, to be materially
different from those contemplated by the forward looking statements.
We undertake no ongoing obligation, other than that imposed by law, to
update these statements. Factors that could affect our results, levels
of activity, performance or achievements and cause them to materially
differ from those contained in the forward looking statements can be
found in our filings with the Securities and Exchange Commission,
including our annual report on Form 10-K, current reports on Form 8-K
and quarterly reports on Form 10-Q, as amended.